A&D Pharma, the largest pharmaceutical group on the Romanian market, posted 9.2 million-euro net profit in the first half of the year, compared with the similar period of last year. These figures were triggered by a restructuring of the group, carried out in the second half of 2008, which entailed a 12% reduction in operating costs, including a 17% cut in work-related costs. The group’s sales were down by 8% to 232.9 million euros.
A&D Pharma abandoned its hedging contracts, as their costs had doubled. "We have temporarily dropped out of our hedging contracts, until costs return to normal," said Dimitris Sophocleous, CFO of A&D Pharma.
A&D Pharma is in advanced negotiations for refinancing a 100 million-euro credit line taken out in 2006 from an 11-bank syndicate, which will mature next month.
"We are finalising negotiations. They involve five banks, the largest in Romania. Each will contribute an equal share. It is a matter of days (until negotiations are finalised i.e.)," added the CFO.
He specified A&D Pharma had not used foreign advisors, and that the terms of the loan were the same as three years ago. The agreement will be a club loan.
According to industry sources, the group was to sign the documents for the 100 million-euro loan yesterday evening, which would make it one of the few companies able to attract funding since the beginning of the year.
Following the restructuring process, the number of employees of the group fell to 3,103 from 3,600 in October 2008. Employees left both as a result of joint agreements – which secured them six to nine salaries, and as a result of a normal personnel migration.
"We have not raised salaries (since the beginning of the year, i.e.) and we are very careful about the employees’ overtime," said Dimitris Sophocleous.
The group is not considering new personnel cuts in the coming period. "We have revised all our company’s business flows," said Robert Popescu, CEO of A&D Pharma. He was confirmed in this position in April, after several months as interim CEO.
The group’s management renegotiated rent for the majority of its 219 Sensiblu drugstores.
In the first half of the year, A&D Pharma posted 20.7 million-euro EBITDA, over 60% of the around 30 million euros budgeted for the full year. According to company representatives, the fourth quarter is the strongest, both in terms of sales and in terms of profit. At the end of the first half, A&D Pharma had 20 million euros in cash in its accounts.
As for information according to which A&D Pharma is to take over distribution of Ozone products in the region (after Ozone’s portfolio was bought by Labormed), A&D Pharma representatives say they are considering any acquisition opportunity, but the group’s activity is now in Romania.
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